Which of the following represents the number of sales dollars generated by each dollar invested in assets?
a. Asset turnover
b. Assets invested
c. Profit margin
d. Operating income
A
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WayToGrow Inc is one of the most popular brands of toys in its home market
The company decides to expand its business abroad and its board of directors feel that instead of trying to establish its presence all at once in multiple markets, it is better to expand one country at a time. This would limit their risk and allow them to analyze customer response, after which they could expand to other similar countries. WayToGrow is following a ________ approach. A) shotgun B) continuous C) born global D) sprinkler E) waterfall
. What elements of car design did Tata change in order to produce their CVP?
a. product design b. manufacturing process c. service model d. all of these
Which of the following would be likely to result in liability to a director of a textile company?
a. The director sells stock in the textile company before a merger is announced. b. The director uses the corporation's offices to buy and sell his own investment securities. c. The director owns stock in an automobile company. d. The director agrees to hire as president a man he has not personally investigated. e. Both the director sells stock in the textile company before a merger is announced and the director uses the corporation's offices to buy and sell his own investment securities.
Nutrition, Inc, a vitamin supplement manufacturer, is financed entirely with equity that is currently privately owned by its managers
The firm is expected to generate earnings of $5 million per year into perpetuity, and all earnings are paid out in dividends. The owner-managers receive no additional compensation. For all of the owner-managers, their shares of the firm's equity account for the bulk of their personal wealth. As a result, in determining their personal valuation of the firm they apply a high discount rate of 33% to their future expected dividends, and thus they value the firm at $15.15 mn. (=$5 mn./0.33). The management team has recently consulted with an investment-banking firm about selling all of the firm's equity publicly; that is, about going public with the firm's shares. Assuming that the current management will continue to operate the firm, the investment banker estimates that the market will value the firm's equity by applying a 25% discount rate to expected future dividends. However, expected dividends to public shareholders will be only $4 mn., because managers will now be paid a total of $1 mn. per year in salaries. Ignoring taxes and transaction costs: the market value of the firm's public shares is (i); the present value of management's salaries (discounted at 33% into perpetuity) is (ii) ; and therefore the management team's wealth gain (or loss) from going public is (iii). (i) (ii) (iii) a. $12 mn. $3.03 mn. -$0.12 mn. b. $16 mn. $3.03 mn. $4.12 mn. c. $16 mn. $4 mn. $4.85 mn. d. $12 mn. $4 mn. $0.85 mn.